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SFO saved, for now or for the foreseeable future?

Somewhat discreetly, as reported in CivilServiceWorld, the government has suggested that its plan to abolish the Serious Fraud Office has been put on hold. The 2017 Conservative manifesto committed to disbanding the SFO and incorporating its responsibilities into the National Crime Agency. This was a decision not well received by practically every practitioner and commentator, including the former Chancellor George Osbourne, who dedicated the lead editorial in the Evening Standard to setting out the reasons for retaining the organisation. The reasons to save the SFO as expressed by business crime practitioners were covered in detail in Blog, Ten reasons to save the SFO.

There was no mention of the proposal in last week’s Queen’s Speech, which led to speculation that the idea had been dropped. The Attorney General Jeremy Wright suggested that the government was rethinking the idea.

The government is continuing to review options to improve the effectiveness of the UK’s response to economic crime, and any measures resulting from this work will be announced in due course. The government is committed to strengthening the UK’s response to bribery, corruption, money laundering, fraud and other forms of economic crime.

The timing of the manifesto commitment, with the Cabinet Office review of economic crime in progress, and before the findings of the consultation on expanding the failure to prevent economic crime offence seemed illogical and ill-timed, leading some to speculate it was based on a personal animosity towards the SFO by the Prime Minister rather than any practical reasoning. The wafer-thin majority of the Conservative/DUP coalition, the significant number of backbench Conservative MPs who have spoken in support of the SFO in the past and the significant Brexit-related workload of the government all make the legislative changes less likely. The life expectancy of the independent SFO may be longer than the May premiership.

However, the SFO cannot afford to relax just yet. At the G5 conference on Anti-Corruption in London on 27 June 2017, David Green, while being non-committal on giving any further guidance on the circumstances when a company can guarantee being offered a DPA or what constitutes a minimum of cooperation, did confirm he will be leaving the SFO at 5:00PM on Friday 21 April 2018, after six years in the job. This timetable means that the advertisement for his successor will be published in the next months, and a successor announced before the end of the year. One side effect of the current uncertainty may be fewer applicants for this vital role. Mr Green’s successor may receive a better hand than that dealt to him in 2012, and would no doubt be far more interested in building on recent success than managing a problematical incorporation with the NCA.

Resources will continue to be a key issue. The blockbuster funding method of high profile SFO cases has been criticised for many reasons, including challenging the independence of a prosecutor, and not allowing the SFO to make the long-term investment in staff that would be ideal. It is to be hoped that the response to the SFO surviving legislative change will not be death by funding cuts.

The G5 conference reinforced the notion that any change to the SFO as the main body dealing with corruption in the UK will not be welcome: discussion regarding the agency, to self -report, or not to self -report, the extent to which internal investigations should take place and (especially) privilege after the ENRC judgement were the key discussion topics over two days, eliciting a number of different views. There are no firm answers to any of these questions, but previous speeches from the SFO and the judgement of LJ Leveson provide pretty good guidance, if not the fine lines that some may prefer. One thing that will clearly not be welcomed is having to learn the various steps from scratch with a new organisation. For more information see Legal update, Third deferred prosecution agreement approved between SFO and Rolls-Royce (Crown Court).

The SFO is subject to almost continuous speculation as to its future, and is never going to get a guaranteed long term period of operation. However, this was the first time a commitment to effective abolition was written down as a manifesto commitment, somewhat ironically at a time of relatively successful performance. The Cabinet Office report and consultation will no doubt come up with helpful suggestions. In the meantime, the government should back the SFO, both verbally and financially, and ensure a successful transformation from the Green era. Perhaps this commitment will depend on the success of the Barclays prosecutions. The pressure to deliver results continues.

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About the Blog

The Practical Law team share their experience and opinions on all aspects of business crime including criminal investigation, procedure and sentencing, powers of prosecuting authorities, corporate liability and specific business crime offences.